Are you ready for the April 2026 UK payroll changes?

Whilst the preparations for any new tax year are typically highly time-consuming for UK pay professionals, April 2026 is anticipated to bring some of the largest changes in many, many years. These include actions from the 2025 Budget, as well as longer-term government policies and strategies.

Employers and their pay professionals will need to work in earnest in the comings weeks to ensure their updated policies, processes and systems are all aligned to meet the April 6 2026 requirements.

The UK government has published guidance for both employers and employees on the UK Government’s Business.gov.uk Employment Changes website. Failing to comply with the new requirements could result in financial penalties and/or legal action.

But the good news for users of SAP SuccessFactors and Employee Central Payroll is that their technology updates will assist businesses to comply with the new requirements.

Let’s take a look at a brief overview of some of the critical action areas:

The Introduction of the Fair Work Agency (FWA)

This new executive agency, part of the Department for Business and Trade, will be overseeing greater employer compliance with employment laws, including the enforcement of the National Minimum Wage, Statutory Sick Pay (SSP) and holiday pay.

In particular, The Employment Rights Act 2025, introduces a wide range of employment law changes from April 6 2026 which will directly impact payroll, including:

• Paternity leave and unpaid parental leave from day one of employment
• Statutory Sick Pay from day one of employment and day one of absence
• Reforms to zero-hours contracts

The Act also introduces powers for enforcement bodies to inspect workplaces and require employers to provide relevant documents and evidence to demonstrate compliance with employment law, as well as the introduction of heavy penalties and legal proceedings for non-compliance.

Further information on the Fair Work Agency can be found on the UK Government’s website.

Changes to National Minimum Wage Rates

Changes to the National Minimum Wage and the National Living Wage come into effect from April 6 2026. Whilst the hourly rates will be increasing, the tax and National Insurance (NI) thresholds remain frozen until 2030-2031. It is also important to also consider the impact on salary sacrifice arrangements, such as pension contributions or cycle to work schemes, and ensure anyone’s deductions don’t push anyone’s pay below the minimum wage threshold.

For employees, they may be a little surprised by the tax and National Insurance payments they will be making from April onwards, so be prepared to answer any queries or questions, or perhaps help be preparing Q&A communications with your HR teams beforehand to help with understanding the impacts on take-home pay.

Changes to Statutory Sick Pay

Whilst the headline change for Statutory Sick Pay (SSP) is that it will eligible from day one of absence from April 6 2026 for all employees, the other related changes are that the lower earning limit is being removed and the rate of Statutory Sick Pay for all employees will be calculated at 80% of their average weekly earnings or the flat weekly rate, whichever is lower.

So, this will be quite a considerable policy and process change for both employers and employees. And for those working in larger businesses, it should be anticipated that the initial adoption of these changes will require greater efforts to ensure the full processes are working as required.

Changes to Holiday and other types of Leave

From April 6 2026, employers will be required to keep “adequate records” for six years, demonstrating a range of data points including amount of statutory annual leave taken by each worker and calculation of holiday pay based on contractual & non-contractual components such as salary, overtime, commission, bonuses & allowances. Regardless of whether an employee leaves the organisation, the holiday records need to be retained from the date they were created for six years.

Other leave types that are changing include Paternity Leave and Unpaid Paternity Leave, as well as Bereaved Partner’s Paternity Leave.

As there are extensive changes for both employers and employees, full details are available on the UK Government’s Business.gov.uk Employment Changes website

Is there anything else you should be preparing for?

Well, the answer is yes, but they have a longer timeframe. Here’s just two that are more pay related:

• Gender pay gap reporting – Any employer with 250 or more employees on a specific date each year must report their gender pay gap data. The snapshot dates are March 31 for most public authority employers and 5 April for private, voluntary and all other public authority employers. Gender pay gap calculations should then be based on the snapshot date and then reported within a year of the snapshot date.
• April 2027 mandatory requirement for payrolling Benefits in Kind and Expenses – Although a little time away, from April 2027, employers will need to capture and report on a greater level of detail and in real-time, and ultimately will see a change in how employee benefits are managed, tracked and reported.

As an SAP SuccessFactors and Employee Central Payroll specialist, Browline Consulting can assist Human Resources teams and Payroll professionals to be able to effectively use their SAP systems to meet the April 2026 and beyond requirements, including end-user training – contact us to discuss any assistance you may need.